The Process for Contractor’s Sub-Clause 17.3 [Employer’s Risks] Related Claims in 1999 FIDIC Red Book

“A claim process should be managed in a professional manner to reach the required results.”  

The Contractor may claim Extension of Time and Cost when he suffers delay and/or incurs cost due to any loss or damage related to the risks defined under Sub-Clause 17.3 [Employer’s Risk].

Sub-Clauses 17.3 and 17.4 in the 1999 Edition of the Red Book deal with the “Employer’s Risks” and “Consequences of Employer’s Risks”.

Sub-Clause 20.1 [Contractor’s Claims] in the 1999 Edition of the Red Book states the procedure for notification and substantiation of the “Additional Payment and Extension of Time Claims”. Clause 20.1 also defines the decision making process of the Engineer.

1   Entitlement to Claim 

If the Contractor suffers delay and/or incurs cost,

due to the risks defined under Sub-Clause 17.3 [Employer’s Risks],

the Contractor is to be entitled to Extension of Time and/or Payment in accordance with Sub-Clause 20.1 [Contractor’s Claims].

1.1 Employer’s Risks under Sub-Clause 17.3

War, invasion, act of foreign enemies.

Rebellion, terrorism, civil war.

Riot, Commotion (by persons other than the Contractor’s personnel)

Munitions of war, explosive materials, ionising radiation.

Pressure waves caused by aircraft or other aerial devices.

Use or occupation by the Employer of any part of the Permanent Works.

Design of any parts of the Works by the Employer’s Personnel.

Any operation of the forces of nature which is unforeseeable.

1.2 The Existence of Loss or Damage

Any of the above mentioned risks results with loss or damage to the Works, Goods or Contractor’s Documents.

1.3 Contractor’s Task

The Contractor gives a further Notice to the Engineer.

The Contractor rectifies the loss or damage in accordance with the Engineer’s requirements.

The Contractor’s Entitlement to claim.

2   Notice to the Engineer

Sub-Clause 20.1 defines and describes the “Notice to the Engineer” procedure.

28 DAYS TIME LIMIT for the CONTRACTOR

1.  The Notice to the Engineer is to be given within 28 days after the Contractor became aware or should have become aware of the claim related event.

2.  If the Notice of Claim is not given within 28 days, the Contractor is not to be entitled to any additional payment, the Time for Completion is not to be extended and the Employer is to be discharged from any responsibility regarding the claim related event.

3   Fully Detailed Claim

42 DAYS TIME LIMIT for the CONTRACTOR

1.  Within 42 days or other period [1] after the Contractor became aware, or should have become aware of the Claim related event, the Contractor is to submit the “Fully Detailed Claim” to the Engineer.

4   Interim or Final Claim

If the Claim related event has a continuing effect;

1.  The Fully Detailed Claim submitted is to be considered as interim.

2.  Monthly, the Contractor is to give further “Interim Claims” with the accumulated Additional Payment claimed and/or Extension of Time claimed.

3.  After the end of the effects of the claim related event, the Contractor is to give a “Final Claim” within 28 days.

5   Engineer’s Response

1.  Within 42 days, after receiving a Claim or any particulars supporting a previous claim or within such other period as may be proposed by the Engineer and approved by the Contractor, the Engineer shall respond with approval or with disapproval and detailed comments. [2]

6   Agreement or Determination of the Claim 

The Engineer is to proceed under Sub-Clause 3.5 [Determinations] to agree or determine;

1.  The Extension of the Time under Sub-Clause 8.4 [Extension of Time for Completion].

2.  The Additional Payment to which the Contractor is entitled under the Contract.

FOOTNOTES

1. Period which is proposed by the Contractor and agreed by the Engineer.

2. The same Sub-Paragraph letters are used as in Sub-Clause 20.1 of the 1999 FIDIC Red Book.

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